Carbon Market Watch Newsletter – May 2018

Editorial

At the recent UN climate talks in Bonn, negotiations on future market provisions largely focused on the process, but key issues will need to be sorted out at the next session in Bangkok before the “Paris rulebook” can be adopted. It is particularly important to have strong rules in place to protect the rights of those affected by climate mitigation projects.

The European Commission has published the list of industries that will continue to receive free pollution permits under Europe’s carbon market after 2020. While the number of industries on the list will be smaller, still up to 95% of industrial emissions in Europe could go largely unpriced in the next decade.

At the same time, the talks on the EU’s next multi-annual budget have kicked off, and the Commission proposes to channel some of the carbon market auctioning revenues to the budget. Polluters should financially contribute to the carbon-free transition, but how effective is the current proposal?